May 28, 2022

Bargain Gold and Silver Prices Boost Worldwide Coin Demand

feature-300x200Bargain prices for gold and silver is fueling global demand for bullion coins.

During September sales by the U.S. Mint of American Eagle gold and silver bullion coins increased dramatically.  Sales of the American Eagle gold bullion coins during September rose to 58,000 ounces, up from 25,000 in August.  Sales of the American Eagle silver bullion coins rose to 4,140,000 ounces in September, more than double the 2,007,500 ounces sold in the previous month (see also Must Know Facts Before Buying American Eagle Silver Bullion Coins).

The increased demand for gold and silver coins seen in the U.S. was mirrored at other major world mints which have seen steadily increasing demand during the third quarter.

The Perth Mint of Australia, one of the largest mints in the world, has also experienced a sales spike in demand for gold and silver bullion.  During September The Perth Mint sold 756,839 ounces of silver bullion up from under less than 450,000 ounces earlier in the year.  The Perth Mint actually sold more gold bullion during September than the U.S. Mint with sales of 68,781 ounces.

The Perth Mint

The Perth Mint – ounces of gold and silver sold

The Perth Mint sells gold and silver bullion as both coin and minted bars and has a much wider product category than the U.S. Mint.

Further declines in the overextended and over-leveraged financial markets due to economic worries is likely to accelerate the recent trend into safe haven assets such as gold and silver.

Courtesy: yahoo finance

Courtesy: yahoo finance

What’s the Difference Between Gold Cast Bars, Gold Minted Bars and Gold Bullion Coins?

2014-Australian-Kangaroo-1kg-Gold-Bullion-Coin-Obverse-SBesides offering an incredible selection of gold and silver precious metal products at fair prices, the Perth Mint excels at educating its customers.

The Perth Mint has specialized in the production of precious metal coins since 1899.  The Perth Mint operates and owns the only gold refinery in Australia and is owned by the Gold Corporation which operates under the statutory authority of the Government of Western Australia.

All gold and silver bullion coins and bars produced by the Perth Mint are available in 99.99% pure gold and are issued as legal tender in Australia.

In this week’s Bullion News, the Perth Mint explains to potential buyers the different factors to take into account when deciding whether to buy gold cast bars, gold minted bars, or gold bullion coins.

Cast Bars, Minted Bars and Bullion Coins

Gold Cast Bars

Investors seeking to pay the lowest premium over spot gold prices will typically consider purchasing gold cast bars since they have the lowest fabrication cost.  The Perth Mint warns buyers that when buying gold cast bars it is essential to make purchases from a totally trustworthy seller to ensure weight, purity and re-saleability.

The Perth Mint sells gold cast bars in 1 ounce, 2 1/2 ounce, 5 ounce, 10 ounce, 20 ounce, and 50 ounce weights.  The current markup over spot on a 1 ounce cast bar is only $35.  Investors planning to make larger purchases such as a 20 oz cast bar can pick it up for less than $100 over the current spot price of $25,633.

Gold Minted Bars

Gold minted bars are cut from rolled gold, have a better finish and appearance, and are stamped with various designs on a minting press.  I have observed while traveling that gold minted bars are extremely popular in gold and jewelry stores in China since they can be purchased in sizes as small as 0.3 grams and often come in a tamper proof security container.

The Perth Mint sells gold minted bars in 5 g, 10 g, 20 g, 1 oz, 50 g, 100 g, and 10 oz.  A one ounce gold minted bar currently sells for a premium over spot of around $44.

Gold Bullion Coins

Gold bullion coins are typically favored by many small investors since they are issued and guaranteed by governments, come in numerous sizes, are difficult to counterfeit due to their thin size, and are issued with distinctive and detailed designs which add another dimension to the desirability of owning gold.  The minting process to produce a gold bullion coin is far more complex than that for producing bars and therefore the premium over the gold spot price is significantly higher.

The Perth Mint sells gold bullion coins ranging in size from only 1/20 ounce to a massive 1 kilogram.  The one kilogram gold bullion coin currently sells for about $42,000.

Peak Gold – 75% of All Gold Deposits Have Already Been Mined

1933-double-eagle1The basic law of supply and demand dictates the quantity of goods offered for sale.  If prices are low and goods cannot be sold at a reasonable profit, producers will be unmotivated to increase production.  If prices  increase as demand for a product is soaring and producers can reap high returns, supply will increase as producers increase output to maximize profits.

When it comes to gold, however, the textbook equation for supply and demand can be thrown out the window.  Gold exists in finite quantities and has become increasing more difficult and expensive to mine.  In addition, major new gold deposits discoveries have dropped to zero in the past two years and ore grades have declined significantly to only 3 grams per tonne from 12 grams per tonne in 1950.

Even as gold exploded in price from under $300 per ounce in 2002 to $1,800 per ounce in 2011 gold production trended lower.  Despite much higher prices, gold miners were simply unable to increase supply.  According to the World Gold Council mine production over the past five years has not increased and average annual production has remained stable at approximately 2,690 tonnes per year.

On a long term basis gold production will continue to decline even further for the simple reason that most of the earth’s richest deposits of gold have already been mined and new gold deposit discoveries have declined significantly (see New Gold Discoveries Decline by 45%).

At the end of 2012 it is estimated that all the gold ever mined in history totaled approximately 173,000 metric tonnes.  According to the Perth Mint, a study done by Natural Resource Holdings estimates that there are only about 56,674 metric tonnes of recoverable gold reserves left.  If this bleak assessment is correct, over 75% of the world’s total gold reserves have already been mined as shown in the infographic below.

To keep things in perspective, the total global gold supply (including both mined gold and gold reserves) totals 230,000 metric tonnes worth about $9.2 trillion at the current gold price of $1,239.  By comparison, the U.S. deficit has exploded to over $17.2 trillion and the Federal Reserve has printed $4 trillion to drive down interest rates by purchasing mortgage backed securities and treasury debt.

In the bizarro world financial system created by the Federal Reserve and other central banks, the meaning of money has become distorted to the point where it is almost meaningless.  The recent decline in gold prices should be viewed as a long term opportunity to increase positions in a currency that central banks cannot create at will in infinite quantities.

The Top 10 Biggest Gold Producing Countries in the World

pygmy-possum-coinThe Perth Mint presents a neat infographic on the world’s top 10 gold producing countries.

China, which loves gold more than anything, came in as the number one producer with annual output of 370 metric tons.  According to the latest official numbers from the IMF, China holds the world’s fifth largest reserves of gold with holdings of 33.9 million ounces.  Unofficially, many analysts say that actual gold reserves held by China are far larger than the “officially” reported numbers.

The second largest gold producer in the world is Australia (home of the Perth Mint) which produced 250 metric tons of gold in 2012.

The United States came in at third place with annual production of 230 metric tons.  As a dubious consolation for those who hate to see the U.S. come in third, keep in mind that the United States still reigns supreme in the number one spot for production of paper currency.

The Perth Mint, which has been producing gold coins since 1899 has produced (in my opinion) some of the world’s most artistic gold and silver coins.

How To Buy, Store and Sell Gold and Silver

By: GE Christenson

You want to buy silver and gold. There is much to consider!

safe

  • Physical metal or paper promises?
  • From which supplier will you buy it? Price is not the only consideration.
  • Where do you store it? Your sock drawer, a safe, insured and secure vault, or in another country?
  • How do you sell it and when?
  • IRS Rules

 

Physical, ETF, or Paper?

Do you want actual physical silver and gold that you can hold in your hand? If you do, then buy coins or bars and skip ahead.

If you want to buy and sell easily without taking delivery of actual metal, then perhaps you should invest in an ETF (Exchange Traded Fund) for gold and silver. The fees are minimal; ETFs are convenient and good for frequent trading. The two most popular are GLD and SLV. They are also criticized by many analysts, so I encourage you to also consider PHYS, PSLV, GTU, and others.

If you want paper, then buy options or futures contracts and be careful. When elephants fight, the grass gets trampled – and most of us are merely grass in the world of futures trading.

You Want to Buy Physical Gold and Silver Coins and Bars. Good! Where?

There are many dealers who will sell over the internet and ship to your home or to a secure storage vault. Their prices will vary slightly and so will their terms for payment and delivery. See the partial list and brief comments at the end of this article to get started. There are many other fine dealers in addition to the few examples I have listed.

Storage

More important than where you buy is whether you will buy for delivery to your home, delivery to a secure domestic storage facility, or for delivery to a vault outside of the United States.

Your home – Convenient and close but vulnerable to fire and theft. Your sock drawer is not recommended – buy a safe, hide it, and tell very few.

Safe deposit box at local bank – Secure, less convenient, probably not insured, and vulnerable to a search warrant, court order, and banking shutdown. Use a local bank, not a branch of a huge mega-bank.

Secure storage in the USA – Very secure and safe but may not be close or convenient. Are you comfortable with such storage? If so, then this is an excellent choice. Choose a vault OUTSIDE the banking system.

International Storage – You can store in commercial vaults in London, Canada, Switzerland, Hong Kong, Singapore, Australia, and other locations. The IRS MAY want to be told what you are storing and its value if you are an American citizen and storing internationally. See IRS Rules.

How Do you Sell Your Gold and Silver?

If you are buying for insurance against devaluing paper currencies, perhaps you intend to hold it for a long time or expect to will it to your family. In either case, don’t sell it.

If your gold and silver coins are in your possession, then you can sell via the internet or take them to a local coin store. Most companies that will sell to you via the Internet or a phone call will also buy back at a slight discount to sales price (they have to sell at a mark-up to stay in business). You can also sell on eBay or to private individuals. There probably will be tax implications, so consult with your tax advisor.

When to Sell Gold and Silver?

Again, there is no right answer for everyone. Some will argue that gold and silver are essential insurance against unbacked paper currencies and so should never be sold. Investors may want to hold until they see some large price, say $150 silver and $4,000 gold. Others wish to trade in and out, buying low and selling high. Your choice will help determine if you want paper silver, an ETF, coins, or bars, stored domestically or offshore. It is easy to sell paper or an ETF. It may be less convenient to sell coins and bars that you have stored in a safe deposit box. It probably will be easy to sell gold stored in Switzerland.

Jim Sinclair, legendary gold trader and investor, says buy “fish lines” and sell “rhino horns.” What he means is that markets, especially gold and silver markets, often move too far, too fast, both up and down. The down moves – the fish lines – scare out leveraged speculators and “weak hands” and usually indicate good buy points for long-term investors. When leveraged speculators, hot money, and the public drive the market higher in a parabolic spike upward, the chart looks like a rhino horn, and that often indicates a good time to sell. There will be many more signals, but most of us are overwhelmed by greed and fear, especially panic, and we often miss the signals. In 1929 the “signal” was to sell when shoeshine boys were giving stock tips. Something similar will happen at the next panic high in gold and silver, but that may be years away.

IRS Rules

The IRS has instituted new rules for United States taxpayers. We are now required to report holdings of foreign assets on form 8938 (Statement of Specified Foreign Financial Assets) and form TD F 90-22.1. Consult with your tax attorney and financial advisor, but the simple interpretation is this:

If you own financial assets in another country worth more than certain amounts, usually you must report these assets on form 8938 with your federal tax return and on form TD F 90-22.1 due June 30 of each year. It is wise to comply with IRS requirements as the penalties can be severe. There may be exceptions that your professional advisor can discuss, but these relatively new requirements may influence your choice of investments and their storage locations.

Alphabetical (partial) list of gold and silver vendors with brief comments on each.

Please do your own research before making a purchase.

APMEX – Large gold and silver bullion and coins dealer operating out of Oklahoma. They maintain a sizeable inventory and will buy and sell online in several currencies with reasonable commissions. Apmex will “lock-in” a purchase price online and accept a personal check in payment (with delayed delivery). If you wish, they will also arrange for secure storage with a subsidiary company and ship directly to that insured storage facility. Apmex will assist with the purchase of silver and gold for investment in your qualified IRA.

Bullion Vault – Secure insured vault storage in London, Zurich, and New York for both gold and silver. Purchases can be arranged quickly and online in different currencies with low costs for storage and insurance. It is easy to sell or take delivery of your metals.

Global Gold – Secure insured vault storage in Switzerland, Hong Kong, and Singapore for both gold, silver, platinum, and palladium. Purchases can be arranged quickly and online with low costs for storage and insurance. It is easy to sell or take delivery of your metals. Ownership is physical and fully allocated.

GoldMoney – Secure insured storage in the UK, Switzerland, Hong Kong, Canada, and Singapore for both gold and silver. Purchases can be arranged quickly and online in different currencies with low costs for storage and insurance. It is easy to sell or take delivery of your metals.

GoldSilver.com – Large gold and silver coin and bullion dealer operating out of California. They maintain a sizeable inventory and will buy and sell online with reasonable commissions. GoldSilver.com will arrange storage in Singapore, Hong Kong, Canada, or the USA. You can easily sell your gold and silver holdings or take delivery. They also will assist with purchasing gold and silver coins and bullion for your retirement accounts. If you have time, watch their instructional videos.

Hard Assets Alliance – This is a relatively new company that attempts to meet many needs including convenient gold and silver purchases with secure insured and allocated storage for gold and silver. Silver can be stored in the US but currently only gold can be stored offshore in several countries. Their downloadable information booklet states:

Exempt from US reporting requirements. As a domestic institution, GBI’s US customers are exempt from both the FBAR and Form 8938 filing requirements if offshore metal storage is elected.”

In some circumstances, this exemption from US reporting requirements may be important in your decision-making process.

Lear Capital – Large gold and silver coin and bullion dealer operating out of California. They maintain a sizeable inventory and will buy and sell online with reasonable commissions. Lear Capital will assist with purchasing gold and silver coins and bullion for IRA and 401k retirement accounts.

Liberty Gold and Silver – A smaller gold, silver, and platinum coin and bullion dealer operating out of Oregon. Liberty Gold and Silver will assist with purchasing gold and silver coins and bullion for IRA accounts and can arrange secure allocated storage in the USA, Canada, Germany, Switzerland, and Singapore.

Perth Mint – Located in Australia, the Perth Mint has been in business for over 100 years and is owned by the Government of Western Australia. The mint refines and produces a variety of products, special coins, and commemoratives in gold, silver, and platinum. The Mint receives over 70,000 visitors each year. You can purchase coins and bullion for delivery and arrange for allocated or pooled storage of your metals.

SilverSaver – Secure insured storage in the USA for gold and silver. You can make convenient periodic purchases by direct withdrawal from your checking account. This allows for a signup and forget “dollar-cost averaging” purchase plan. You can also take delivery of your gold and silver or easily sell it back to SilverSaver.

The Ultimate Gold Trust – Gold can be purchased and held in Switzerland. This storage solution is recommended by Julian D. W. Phillips, a frequent commentator on gold and gold storage options. Read his latest article on the safety of offshore storage.

GE Christenson
aka Deviant Investor

Gold In The News – German Gold, Gold Confiscation, Technical Charts, New Perth Mint Coins

Gold news from around the web-

Gold Confiscation?

Are those predicting the confiscation of gold by the U.S. government simply seeking headlines or seriously misguided?  Jim Sinclair has the answer.

I am sick of all this confiscation talk of gold and even gold companies. It emanates from gold people who do not know or understand the history of gold. We condemn MSM for inaccurate, false and misleading news. I condemn gold writers who practice sensationalism, who offer their opinions as if they were facts and simply make things up out of thin air as if they were insiders privy to things that no one else is. Right now leaders of this community are printing stuff as misleading as MOPE or MSM ever have.

Eric De Groot put what I have been trying to teach you perfectly today. In the 1930s gold was to the monetary system what QE is today, a means of increasing the supply of money for Fed and Treasury discretionary use. The US Secretary of the Treasury and President Roosevelt set the gold price higher at their daily breakfast together arbitrarily. Higher because to create money then the system required a higher value of gold to have more money outstanding. This is why Roosevelt ordered the confiscation of gold in order to unfold his type of monetary stimulation, his QE. This is what confiscationophiles simply do not know.

 Your fears and the outrageous untrue statement by the Scottish hedge fund manager are based on totally wrong reasoning and misunderstanding. Gold was not confiscated because it was going up in price. Gold’s order of confiscation came as a tool of monetary stimulation in order to create monetary creation in order to attempt to increase employment.

So, Exactly Where is Germany’s Gold?

The Germans, tough with monetary policy, turn out to be wimps when it comes to safeguarding their own massive 3,396 ton gold stockpile.  Turns out that the Germans, who allegedly hold most of their gold in French, British and U.S. vaults, never even bothered to conduct a physical audit of their holdings – talk about trusting your neighbors! After severe criticism and a national “Bring Back Our Gold” campaign, the Bundesbank is finally promising to conduct audits and bring their gold back home.  MarketWatch wonders if the expatriation of German gold may be the beginning of a move to a gold backed currency.

Gold and Silver Technical Charts

Some really amazing gold and silver charts suggest that we may be in the initial stages of a massive gold and silver rally.

Gold and Silver – The Ideal Holiday Gift

A stunning selection of new gold and silver coins from The Perth Mint  provides the answer to “what should I get her for Christmas?”  Included in the November product releases are some unique rectangular colored silver coins.

Gold Through the Centuries

One of the largest Roman gold coin hoards every found was discovered in Great Britain.  The coins are approximately 1600 years old.  Any guesses on what $10,000 of U.S. currency buried today would be worth in the year 3612??

Unsinkable Silver Investments? World Mints Unveil Centenary Titanic Coins

Titanic

The sinking of the Titanic has captured the imagination of people since the tragedy struck on the night of the 14th April 1912. The centenary of the disaster is being marked around the world and particularly in the UK and North America which were deeply affected by the tragedy. Victims of the disaster came from around the world and to mark the occasion three of the world’s major Mints are also marking the loss of the Titanic with issues of commemorative Titanic coins. As this is a major anniversary it is likely that these coins will be extremely popular and make an excellent addition to any collection – and one that should increase in value in the years to come.

The Unsinkable Titanic
The launch of the ‘unsinkable’ Titanic took place on 31st May 1911, and this centenary was marked last year in Belfast where the ship was launched from the Harland & Wolf shipyard into Belfast Lough. The Titanic set sail on her maiden voyage on 10th April 1912 – sailing with over 2,000 people on board. Four days later the ship famously struck an iceberg in the North Atlantic and, with her watertight compartments breached, she sank. An estimated 1,500 people lost their lives in the disaster and the event caused shock around the world. This year the Royal Canadian Mint, The British Royal Mint and the Australian Perth Mint are all issuing coins to mark the centenary. The Mints have commissioned unique designs for their coins and are all offering relatively low issues, which will make these coins of additional interest to collectors.

Canadian Coins
The Royal Canadian Mint issued a $10 Fine Silver coin, with a mintage of 20,000. The Canadian coin is the highest denomination coin but will have the largest mintage. The design features the Titanic showing the ship in full steam with an iceberg in the foreground. The obverse of the coin also features the 2003 portrait of Queen Elizabeth II created by Susanna Blunt. Canada played a significant role in the aftermath of the disaster and the port of Halifax in Nova Scotia received many of the survivors. It was also the burial site of many of the victims recovered from the North Atlantic. In addition to the $10 coin, the Royal Canadian Mint has also issued a 50 cent silver-plated coin and a 25 cent coin – featuring a full color design.

The British £5 Commemorative Coin
The British Royal Mint has issued a £5 silver coin to commemorate the Titanic disaster. Featuring a design by Lee Robert Jones, the image of the liner is illustrated alongside an image of the goddess “Thane”. A statue of Thane, a goddess of death, was erected as a memorial in Belfast in 1920 – eight years after the sinking of the liner. The Royal Mint issue is a limited edition of only 7,500 coins which is presented in a stylish case, with a certificate to authenticate the coin.

A Full Color Tribute
The Perth Mint in Australia minted the lowest number of commemorative coins with only 5,000 coins produced. The $1 dollar Australian silver coin features an attractive full color design by Aleysha Howarth, and is the only one of the various Titanic coin releases to feature a color design. This factor combined with the low mintage is likely to make it one of the most sought after Titanic commemorative coins.

Each Titanic coin comes in a handsome display case along with a numbered Certificate of Authenticity.  For orders and further information, please visit the Perth Mint Titanic product page.

 

This year sees the centenary of the loss of the iconic Titanic. Three major world Mints will mark the occasion with commemorative coins, all of which are likely to be highly sought after and prove to be a sound investment.

Perth Mint Introduces Stunning Silver Proof Coins

The Perth Mint has offered a variety of stunningly beautiful coins over the years.  As an investor/collector, it is particularly appealing to purchase coins that not only have the intrinsic value of precious metals but also offer a magnificent coin design.

The latest offerings from the Perth Mint highlight their artistry in producing coins with colorization.  The limited mintage coins are not only enjoyable to own and display but also make excellent gifts, especially for those who have never owned precious metal coins.

The three latest silver proof coins from the Perth Mint illustrate that investing in precious metals can not only be profitable but also enjoyable.

Australian Sea Life II – The Reef – Hawksbill Turtle

This coin’s reverse features the endangered Hawksbill Turtle which lives in the coral reefs of northern Australia.  The silver proof coin’s mintage is limited to only 10,000 coins and is offered in 1/2 ounce size 99.9% pure silver.  The coin’s obverse depicts Her Majesty Queen Elizabeth along with the 2011 year date.  A display case is included with the coin.  The cost of the coin in US dollars is $65.20.

Australia’s Box Jellyfish 1 oz Silver Proof Coin

Depicting the deadly box jellyfish on the coin’s reverse and offered in 99.9% pure silver, this 1 ounce coin has extremely limited mintage of 5,000.  The obverse of the coin features Her Majesty Queen Elizabeth II and also the monetary denomination.  A high gloss timber presentation case houses each coin.  The cost of the coin in US dollars in $112.04.

Transformers III – 1 oz Silver Proof Trio

Transformers III comes as a three coin set with mintage limited at 5,000 coins. Featured on the respective coin’s reverse are colorized depictions of Bumblebee, Optimus Prime and Megatron.  Each 1 ounce coin is struck in proof quality 99.9% pure silver and the obverse depicts Her Majesty Queen Elizabeth.  Each coin comes housed in a clear presentation box.  The cost of the three coin set in US dollars is $288.82.

While the Perth Mint offers a wide variety of coins, many in limited mintage, the U.S. Mint has taken the opposite approach based on the theory that not every collector who wanted the coin would be able to purchase it.   Neither has the U.S. Mint ever produced coins with colorization and many of the U.S. coin designs are dated.

The U.S. Mint should consider producing limited mintage coins with more imaginative designs to create some product excitement and expand the universe of coin and precious metal collectors/investors.

 

 

 

As Gold Hits Record Highs, Perth Mint Finds Success in Smaller Sized Coins

As the price of gold continues to climb, the cost of purchasing a one ounce gold bullion coin is approaching $1,600.  In order to provide the opportunity to own gold within a more reasonable price range, innovative mints have begun offering smaller sized gold coins.   In April 2010, the Perth Mint of Australia introduced a half gram 99.99% pure gold coin named the Mini Roo.

Struck with a fineness of .9999, each Mini Roo contains 0.016 troy ounces of gold. The coins have a diameter of 11.60 mm and thickness of 0.70 mm. By comparison, the one ounce Australian Gold Kangaroo has a diameter of 32.60 mm and thickness of 2.80 mm. The half gram Mini Roo and 1 oz. Gold Kangaroo are shown side by side in the image below.

According to the Perth Mint’s website, the Mini Roo is currently priced at $54.18. A major precious metals dealer’s website currently quotes the price of a single one ounce 2011 Gold Kangaroo at $1,668.23.

Alexandra Lucchesi of the Perth Mint Public Relations Department was kind enough to some insights on the objectives and sales levels of the diminutive gold coins.

Gold and Silver Blog:  Can you provide us with any indication of the sales levels of the Mini Roo half gram gold coin and how it compares to the sale of one ounce coins?

Alexandra:  To compare sales of the Mini Roo and 1oz gold bullion coins would not be a valid comparison.  The issues vary considerably in weight and price, and therefore, do not encompass the interest of the same individual and institutional investors.  Furthermore, the Mini Roo is targeted more toward collectors and gift buyers, whereas the gold coins of the Australian Kangaroo and Lunar series are directed more toward investors.

Gold and Silver Blog:  Has the half gram gold coin met sales expectations and have sales increased as the price of gold has climbed?

Alexandra:  The release of the Mini Roo has met our objectives at both wholesale and retail levels, with sales exceeding more than 15,000 2010-dated coins to date since being released in April last year.  With the 2011 coin only just released a fortnight ago [April 5, 2011], we can not yet estimate sales for the remainder of the year, although, with periodic prompted promotion, we are also anticipating favourable sales of this issue.

Gold and Silver Blog:  Will the Mini Roo become a regular annual issue?

Alex:  A Mini Roo was first introduced to the market in April 2010.  Complementing the world renowned Australian Kangaroo gold bullion coin series, the Mini Roo is expected to be released each year and will continue to portray the identical design as, or a simplified version of, the iconic Australian Kangaroo annual issues.

Gold and Silver Blog:  I would suspect that the much lower cost of the Mini Roo allows greater participation by investors and collectors as well as placing the Mini Roo within the affordable gift category.  Was the higher price of gold the determining factor in deciding to produce the half gram coin?  Have the offerings of smaller sized gold coins resulted in an increased number of new customers?

Alexandra:  That is correct.  The Perth Mint introduced the Mini Roo to encourage a broader audience to start investing in, or collecting, precious metal coin products.  In addition, the smaller coin was perfect to capture the interest of those who, traditionally, were unable to afford the classic Australian Kangaroo bullion coin sizes.  The timing for the initiative was also enhanced by the rising price of gold.  The lower price point of the button-sized Mini Roo does give individual precious metal investors, coin collectors and gift buyers the opportunity to purchase a pure gold coin at an affordable price featuring a similar design as its traditional counterpart.


The Perth Mint Australia

As Silver Prices Soar, Silver Coins Get Smaller

Ten years ago, one ounce silver bullion coins could be purchased for around $7 each. This reflected market silver prices below the $5 level. As recently as one year ago, the prices for one ounce bullion coins had risen to around $18 each. Following the dramatic rise in the silver price experienced in the last five months, newly minted one ounce silver bullion coins from a major world mint are now priced around $39, assuming a purchase in quantity.

Silver has been called “poor man’s gold”, but after the significant rise in price, even the traditionally smallest sized coins are becoming expensive. Thus, it was only a matter of time before smaller sized coins would be introduced.

Last month, the Perth Mint of Australia began selling one-tenth ounce Silver Koala coins. Previously, this series had been offered in sizes ranging from one-half ounce to 1 kilo. Other numismatic and bullion coin offerings from the Perth Mint have also been available in sizes starting at one-half ounce, but this seems to be the first instance that a one-tenth ounce size has been available.

As will generally be the case with silver products, the smaller weight offerings carry a larger premium than than larger weight products. This can be the result of the fixed costs associated with manufacture or volume discounts which may be available for purchases in bulk quantities.

The Perth Mint’s website shows the one ounce 2011 Silver Koala priced at US $41.88, reflecting a premium of $5.57 or 15.34%. The one-tenth ounce version is priced at $13.76, reflecting a premium of $10.13 or 279%! (All prices at time of post.)

Obviously when purchasing silver for investment purposes, it makes sense to pay the lowest premium possible. That way, you will get more silver for your money and won’t risk seeing contraction of premiums offset gains.

The move by the Perth Mint to smaller sized silver coins is certainly an interesting one. How long will it be before other world mints follow suit?